Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2021 (1) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2021 (1) TMI 355 - ITAT DELHIAddition u/s 40A - Payment in cash for purchase of land from farmers and villagers in excess of the limit provided u/s 40A(3) - HELD THAT:- Inter alia that when the assessee has not debited the amount of cost of land in its profit & loss account, available and when no expenses relatable to the addition in question have been claimed, provisions contained u/s 40A(3) of the Act are not attracted. Assessee company has proved on record that the payment in question was mere reimbursement made by CWPPL. Purchase of land in the instant case was not treated as stock-in-trade. Moreover, para 3(b) of the Collaboration Agreement, available categorically provides that CWPPL shall reimburse all costs and expenses incurred by the assessee with respect to the acquisition of the said land and accordingly in the books of account which have otherwise been accepted by the Revenue, the said amount received from CWPPL was shown as reimbursement. Thus when the assessee has not debited the amount of cost of land in the profit & loss account nor claimed any deduction in respect of cost of land by way of computation, provisions contained u/s 40A(3) are not attracted, so AO/CIT(A) have erred in making / confirming the disallowance - Decided in favour of assessee.
|